European stocks were mixed as reports showed China and German manufacturing activity rose more than expected.

HSBC/Markit's purchasing managers' index (PMI) for manufacturing in China climbed to 52 in July from 50.7 a month earlier, beating estimates for a reading of 51. A figure above 50 signals expansion.

Markit/BME separately released its PMI for German manufacturing which increased to 52.9 this month from 52 in June, ahead of expectations of 51.9.

"A lot has been said about the slowdown in the Eurozone recently, particularly in Germany which has been the most concerning thing as many don't believe we can see a strong recovery in the region without its strongest member leading the way," said Craig Erlam, analyst at Alpari UK.

French manufacturing contracted in July at its fastest pace this year, according to Purchasing Managers Index (PMI) numbers that were worse than forecast.

French manufacturing PMI shrank from 48.2 to 47.6 month-on-month, compared to consensus expectations of 48.0.

This morning's agenda will also see the release of UK retail sales data for June which is forecast to show a 4.6% gain following a 4.7% increase in May.

Later on, US reports on new home sales and initial jobless claims are due. The Federal Reserve is closely monitoring data to determine whether the economic recovery is strong enough to hike interest rates and scale back monthly bond purchases further.

Unilever, Roche

Unilever declined as the maker of Dove soap and Lipton tea reported a rise in second quarter revenue that fell short of analysts' estimates.

Roche gained after largest maker of cancer drugs reiterated its forecast for revenue this year to increase by a low- to mid-single-digit percentage at constant exchange rates and earnings per share to rise faster than sales.

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